Brek also has the option to acquire an additional 5% undivided interest in Gasco's undeveloped acreage by paying a total of $10.5 million in two equal installments on or before January 1, 2004 and January 1, 2005. A 2.5% interest will be conveyed to Brek upon receipt of each installment.
For the 25% undivided interest, Brek Energy has exchanged 4,750,000 shares of common stock of Gasco, 500 shares of Gasco's preferred stock, and an additional 1,500,000 shares of Gasco common stock from certain other shareholder of Gasco, which Brek acquired for 4,125,000 shares of its common stock.
Brek is now party to various exploratory and operating agreements covering all of the acquired lands, including those with Phillips Petroleum and Burlington Resources. Clarification of Brek Energy's land positions, project overviews, and engineering valuations will be updated in subsequent news releases.
"Brek now has direct interests in natural gas leases in what have been historically prolific gas plays in the Rocky Mountains, in addition to oil leases in the San Joaquin Valley of California and Edwards County, Texas. We are pleased to be able to directly participate in the development of prospects through our agreements with other oil and gas companies in these areas." said Ian Robinson, Brek's chairman.